Insuring Title to Indian Lands. David A. Green, Underwriting Counsel Stewart Title Guaranty Company

Transcription

1 Insuring Title to Indian Lands David A. Green, Underwriting Counsel Stewart Title Guaranty Company

2 Introduction Title Insurance of Indian Lands is considered a Special Risk CALL YOUR UNDERWRITER Different companies may have different requirements, but all underwriters will want to know and review The term Indian in modern usage U.S. Code Title 25

3 What Does Indian Lands Mean? Lands Held in Fee by a Tribe or Tribal Entity Lands held in Trust for a Tribe through the Bureau of Indian Affairs (BIA) Allotment Lands held in Trust by the BIA for an individual or group of individuals (usually a family, descendants of a particular person)

4 NOT Indian Lands Land outside of the Tribal Trust Lands or Reservation, owned in Fee by an individual Tribe Member Native Americans are United States Citizens, and individuals must pay Federal Income Taxes like any other citizens, so we do not treat like foreign nationals in closings

5 Legal Status of Indian Nations within the United States Indian Tribes recognized by the United States Government enjoy Sovereign Immunity, in many ways like any other foreign government However, Indian Tribes exist under a Trust relationship with the Federal Government, most akin to a guardianship and receivership relationship

6 Legal Status (cont) Congressional authority to deal with Indian Tribes is in Article I of the U.S. Constitution. Extreme deference has been given by the courts to Congress on this subject. Early Supreme Court cases defined the Trust relationship between U.S. and Indian nations, and prohibited U.S. citizens from purchasing land directly from Indian Tribes.

7 Legal Status (cont) Indian Citizenship Act of 1924, along with associated Revenue Act, declared all Native Americans to be United States citizens, and subject to income taxation, and effectively nullifying the Indians, not taxed language of Article I. Indian Reorganization Act of 1934 marked a major step in the modern relationship between the U.S. and Tribes. Tribes registered and recognized under Bureau of Indian Affairs authority Tribes created constitutions and council governments, under rules promoted by BIA. Significant latitude was granted to the Tribes to choose their procedures and internal governance rules. - a remarkably good summary of history of the legal relationships between the United States and Native Tribes

8 Tribal Entities Tribes have constitutions, laws, courts, councils, and other governmental institutions Many Tribes have chartered corporations and LLCs under their laws These Tribal Entities must: Have proper authority documentation Demonstrate that they are authorized to do business in the State (like any foreign corp) Waive Sovereign Immunity

9 4 Types of Indian Land Transactions Fee Land outside a Reservation, owned, being acquired by, or mortgaged by, a Tribe or Tribal entity Fee To Trust When a Tribe or Tribal Entity is acquiring Fee land in order to add to their Reservation Trust Tribal Trust Lands Any transaction involving a parcel in a Reservation Trust, including leases, mortgages, and assignment of leases Allotment Lands Lands held in Trust through BIA for an individual, or the descendants of an individual

10 CALL YOUR UNDERWRITER Underwriting Guidelines for Indian Lands might not be directly available for review from your Underwriter Will probably require Senior Level Approval, however each Underwriter might define their approval levels Obtaining all necessary documentation can take months or more, but most of that work will be done by the Parties lawyers and other agents

11 Indian Land in the Back Chain There do exist lands that were once under Tribal Trust, but are now held in Fee, outside of BIA jurisdiction, often from early Allotments If you ever see any indication of this in your search or the title application, CALL YOUR UNDERWRITER It will be necessary to confirm that the BIA approved the transfer

12 Easements over Indian Lands

13 Documents Needed from the Tribe Evidence of Federal Recognition of the Tribe Tribal Constitution, By-Laws, and other Organizational Documents Resolution or other Authorization to engage in the Transaction Specific Signatory Authority for Tribe s representative

14 WAIVER OF SOVEREIGN IMMUNITY

15 Documentation Needed from BIA Certified Title Status Report There are uncertified TSRs, much like a Preliminary Title Report we would issue. Needed for any Property held in BIA Trust

16 BIA Title Status Report

17 When a Tribe acquires Fee land for the Purpose of adding to their BIA Trust, there is a complex application process, and title may be ordered from the agent months before closing There will be an Application to the BIA to begin Tribal Resolutions are needed for Application Fee to Trust

18 There may be extended correspondence over months or years to resolve issues, or the process may be relatively quick Eventually, there will need to be a Decision letter from the BIA approving the Transfer Fee To Trust (cont)

19 Questions Your Underwriters Might Ask

20 A Claim Fact Pattern Condo Development on a 99-year leasehold from Tribe in desert California A unit is foreclosed, and then sold as REO by the FC Lender, without obtaining necessary Assignments of Leasehold from the Tribe and BIA (deed provided was CA Grant Deed) Title company needed to hire counsel to untangle the red tape involved in obtaining the necessary assignments and approvals, and then reforeclosing to establish title for the Insured Total cost was well over $30,000 in legal fees

21 Recent Developments United States Court of Appeals, Ninth Circuit. BIG LAGOON RANCHERIA, a federally recognized Indian tribe, Plaintiff Appellee Cross Appellant, v. State of CALIFORNIA, Defendant Appellant Cross Appellee. Decided: January 21, 2014

22 Big Lagoon Rancheria For BIA to accept lands into Trust, the Tribe must have been recognized in 1934 (Carcieri v. Salazar, SCOTUS, 2009) Administrative Procedures Act (APA) provides for 6 year S/L to challenge decisions State didn t challenge (probably) illegal Trust acquisition for over 17 years (Tribe had been wrongly listed as a Recognized Tribe for years, but was not actually a recognized Tribe) 9 th Circuit Court of Appeals left open the question of whether a S/L can exist to challenge an illegal or unconstitutional action by an agency (Court found that the S/L clock started only one year before present suit, and adjudged on merits in favor of the State) It is possible that a suit could be brought to challenge ANY Trust acquisition within 9 th Circuit on either the basis of an illegal (not merely irregular) acquisition process, OR because of a Tribe being illegally registered with the BIA.

23 Call Your Underwriter!!! At the first indication that your Property might require Tribal Authority, Call Your Underwriter CALL YOUR UNDERWRITER

24 The Willamette Stone

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